Clinton, Sanders rip Pfizer merger

Two large drugmakers, U.S.-based Pfizer and Ireland’s Allergan, joined forces Monday, creating the world’s biggest drug manufacturer.

Sanders called on President Obama to stop the merger, saying it “would be a disaster for American consumers who already pay the highest prices in the world for prescription drugs” and would “allow another major American corporation to hide its profits overseas”.

Democratic frontrunner Hillary Rodham Clinton said Monday that, if elected, she would put forward proposals to prevent such mergers.

It was not immediately known how many jobs would be lost as a result of the merger.

Under terms of the Allergan deal, the companies will exchange 11.3 Pfizer shares for every Allergan share.

Last year, the U.S. Treasury Department initiated new regulations created to curb the financial benefits of inversions.

Pfizer and Allergan will be combined under Allergan PLC, which will be renamed Pfizer PLC. As an Irish-domiciled company, it will have less costly access to those funds. He called the delay decision “pretty conservative and a little late”.

The Pfizer boss, a long-time critic of U.S. tax policy, added: “I don’t think Ireland should be in any way ashamed of the set of capabilities it has that are attracting businesses to Ireland”.

Now No. 2 among drugmakers globally, Pfizer posted revenue of $49.6 billion in 2014, when Allergan reported $13.1 billion. The combined company would have annual sales of about $64 billion.

Brent Saunders, CEO of Allergan, noted in the release that “the combination of Allergan and Pfizer is a highly strategic, value-enhancing transaction” that will allow Allergan “to operate with greater resources at a much bigger scale”.

“We can not delay in cracking down on inversions that erode our tax base”, the former USA secretary of state said in a statement.

Indeed, Pfizer expects to see a new tax rate of between 17 to 18 percent, which is less than what their corporate tax rate of 25 percent is now.

The combined company, which will be called Pfizer plc, will bring together a huge USA pharmaceutical company best known for iconic drugs like the cholesterol-fighting Lipitor and erectile dysfunction medication Viagra with Allergan, which is best known for making wrinkle-smoothing Botox.

In afternoon trade, shares of Pfizer had dropped 2.5 per cent to $43.65 and Allergan had fallen 2.8 per cent to $422.34.

Pfizer CEO and Chairman Ian Read will retain his titles, while the new company’s board will hold all eleven of Pfizer’s current directors, in addition to four directors from Allergan.

After the transaction, Pfizer shareholders are expected to own about 56 per cent of the combined company, with the remaining 44 per cent owned by Allergan shareholders.

The combined companies will be rebranded to Pfizer Plc, but legally, the merged company will be combined under Allergan Plc.